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Cable & Wireless Reports Preliminary Q3 2017 Results

Thu, 02 Nov 2017 16:21:03 -0400    Breaking News Business Caribbean earnings Top Stories World

News Americas, MIAMI, Nov. 02, 2017:  Cable & Wireless Communications Limited (“C&W”) is a leading telecommunications operator in its consumer markets, which are predominantly located in the Caribbean and Latin America, providing entertainment, information and communication services to 3.5 million mobile, 0.4 million television, 0.6 million internet and 0.6 million fixed-line telephony subscribers2. In addition, C&W delivers B2B services and provides wholesale services over its sub-sea and terrestrial networks that connect over 40 markets across the region.

Liberty Global’s Acquisition of C&W

On May 16, 2016, a subsidiary of Liberty Global acquired C&W (the “Liberty Global Transaction”). Revenue and subscriber statistics have been presented herein using Liberty Global’s definitions for all periods presented unless otherwise noted. Further adjustments to these metrics are possible as the integration process continues. Significant policy adjustments have been considered in our calculation of rebased growth rates for revenue. For additional information on Liberty Global’s definition of rebased growth rates, see footnote 5. In addition, effective for the 2016 fiscal year, C&W changed its fiscal year end from March 31 to December 31 to conform with Liberty Global.

Operating highlights:

  • RGU3 additions of 20,000 in Q3 took YTD additions to 15,000•  Broadband4 RGU additions of 10,000 in Q3, compared to a decline in Q2

    •  Network upgrades and improved product offering led to gains of 4,000 and 6,000 in Panama and Jamaica, respectively

    •  23,000 next-generation WiFi “Connect Boxes” across our broadband subscriber base at the end of Q3 2017; significantly enhancing the quality of the in-home broadband experience

    •  Video decline of 4,000 RGUs in Q3, in-line with Q2 losses

    •  New bundles were introduced in Trinidad; however, the underlying headwinds from over-the-top services continued, resulting in video attrition of 3,000. In Panama, our cable video gains were offset by DTH losses

    •  Fixed voice additions of 14,000 in Q3, compared to a 9,000 decline in Q2

    •  Bundles driving demand in Jamaica, Trinidad and Panama

  • Mobile subscribers5 declined by 43,000 in Q3•  Subscribers in Panama fell by 22,000 as we repositioned our offers to focus on higher ARPU customers. New competition in the Bahamas continued to impact our business and drove a 19,000 reduction in mobile subscribers
  • New build and upgrade initiatives delivered approximately 85,000 premises in Q3, bringing the YTD total to approximately 165,000 new or upgraded homes

Update on Impacts of Hurricanes Irma and Maria:

  • In September 2017, Hurricanes Irma and Maria impacted a number of our markets in the Caribbean
  • Portions of C&W’s mobile and fixed networks were significantly damaged as a result of the hurricanes, most notably in the British Virgin Islands and Dominica. In addition, impacted markets are dealing with extensive damage to homes, businesses and essential infrastructure. In these collective areas, our mobile services are largely restored, however significant portions of the fixed networks are not currently operational
  • We are committed to helping people across the Caribbean region recover and rebuild. To that end we launched the Cable & Wireless Charitable Foundation which will distribute funds to assist victims of the hurricanes. We have also provided credits to mobile customers in impacted C&W markets
  • We currently estimate that more than $50 million of property and equipment additions would be required to restore 100% of the damaged networks in the impacted C&W markets, and that the effects of the hurricanes will negatively impact C&W’s revenue and Adjusted Segment EBITDA  by between $15 million and $25 million during Q4 2017. Although these negative impacts will decline as the networks are restored and customers are reconnected, we expect that the adverse impacts of the hurricanes on CWC’s revenue and Adjusted Segment EBITDA may continue throughout 2018 and beyond. These estimates are preliminary and are subject to change
  • We are part of an integrated group property and business interruption insurance program covering all impacted markets up to a limit of $75 million per occurrence, which is generally subject to approximately $15 million per occurrence of self-insurance•  This policy is subject to the normal terms and conditions applicable to this type of insurance. We expect that the insurance recovery will only cover a portion of the incurred losses of each of our impacted businesses
  • We have not recognized any potential insurance proceeds related to the hurricane losses, and we do not currently expect to receive any significant reimbursements in 2017

Footnotes

  1. For purposes of calculating rebased growth rates on a comparable basis, we have adjusted the historical revenue for the three months ended September 30, 2016 to (i) reflect the impacts of the alignment to Liberty Global’s accounting policies, (ii) include the pre-acquisition revenue of entities we acquired during the current period for the three months ended September 30, 2016 to the same extent that the revenue of such entities are included in our results for the three months ended September 30, 2017 and (iii) reflect the translation of our rebased amounts for the three months ended September 30, 2016 at the applicable average foreign currency exchange rates that were used to translate our results for the three months ended September 30, 2017. The adjustments reflected in our rebased amounts have not been prepared with a view towards complying with Article 11 of Regulation S-X. In addition, the rebased growth rates are not necessarily indicative of the rebased revenue that would have occurred if Liberty Global’s acquisition of C&W had occurred on the date assumed for purposes of calculating our rebased amounts or the revenue that will occur in the future. The rebased revenue growth percentage has been presented as a basis for assessing growth rates on a comparable basis, and is not presented as a measure of our pro forma financial performance.
  2. During September 2017, Hurricanes Irma and Maria caused significant damage to our operations in certain geographies within C&W, including the British Virgin Islands and Dominica, and to a lesser extent Turks & Caicos, the Bahamas, Anguilla, Antigua and other smaller markets, resulting in disruptions to our telecommunications services within these islands. The subscriber counts for British Virgin Islands, Dominica, Anguilla and Turks & Caicos reflect the pre-hurricane subscriber counts as of August 31, 2017 as we are still in the process of assessing the impacts of the hurricanes on our networks and subscriber counts in these markets. As of October 25, 2017, we estimate that we have not yet been able to restore services to the majority of our aggregate fixed-line customers and RGUs in the British Virgin Islands, Dominica, Anguilla and Turks & Caicos. While mobile services have been largely restored in these markets, we are still in the process of repairing our mobile network infrastructure.
  3. RGU is separately a Basic Video Subscriber, Enhanced Video Subscriber, DTH Subscriber, Internet Subscriber or Telephony Subscriber (each as defined and described below). A home, residential multiple dwelling unit, or commercial unit may contain one or more RGUs. For example, if a residential customer in our Austrian market subscribed to our enhanced video service, fixed-line telephony service and broadband internet service, the customer would constitute three RGUs. Total RGUs is the sum of Basic Video, Enhanced Video, DTH, Internet and Telephony Subscribers. RGUs generally are counted on a unique premises basis such that a given premises does not count as more than one RGU for any given service. On the other hand, if an individual receives one of our services in two premises (e.g., a primary home and a vacation home), that individual will count as two RGUs for that service. Each bundled cable, internet or telephony service is counted as a separate RGU regardless of the nature of any bundling discount or promotion. Non-paying subscribers are counted as subscribers during their free promotional service period. Some of these subscribers may choose to disconnect after their free service period. Services offered without charge on a long-term basis (e.g., VIP subscribers or free service to employees) generally are not counted as RGUs. We do not include subscriptions to mobile services in our externally reported RGU counts. In this regard, our September 30, 2017 RGU counts exclude our separately reported postpaid and prepaid mobile subscribers.
  4. Internet Subscriber is a home, residential multiple dwelling unit or commercial unit that receives internet services over our networks, or that we service through a partner network (defined below). Our Internet Subscribers do not include customers that receive services from dial-up connections.
  5. Our mobile subscriber count represents the number of active subscriber identification module (“SIM”) cards in service rather than services provided. For example, if a mobile subscriber has both a data and voice plan on a smartphone this would equate to one mobile subscriber. Alternatively, a subscriber who has a voice and data plan for a mobile handset and a data plan for a laptop (via a dongle) would be counted as two mobile subscribers. Customers who do not pay a recurring monthly fee are excluded from our mobile telephony subscriber counts after periods of inactivity ranging from 30 to 90 days, based on industry standards within the respective country.

About C&W Communications

C&W is a full service communications and entertainment provider that delivers market-leading video, broadband, telephony and mobile services to consumers in 18 countries. Through its business division, C&W provides data center hosting, domestic and international managed network services, and customized IT service solutions, utilizing cloud technology to serve business and government customers.

C&W also operates a state-of-the-art submarine fiber network – the most extensive in the region.

Learn more at www.cwc.com, or follow C&W on LinkedIn, Facebook or Twitter.

About Liberty Global

Liberty Global is the world’s largest international TV and broadband company, with operations in more than 30 countries across Europe, Latin America and the Caribbean. We invest in the infrastructure that empowers our customers to make the most of the digital revolution. Our scale and commitment to innovation enable us to develop market-leading products delivered through next-generation networks that connect our over 24 million customers who subscribe to over 50 million television, broadband internet and telephony services. We also serve over 10 million mobile subscribers and offer WiFi service across 10 million access points.

Liberty Global’s businesses are comprised of two stocks: the Liberty Global Group (NASDAQ:LBTYA) (NASDAQ:LBTYB) (NASDAQ:LBTYK) for our European operations, and the LiLAC Group (NASDAQ:LILA) (NASDAQ:LILAK) (OTC Link:LILAB) which consists of our operations in Latin America and the Caribbean.

The Liberty Global Group operates in 12 European countries under the consumer brands Virgin Media, Unitymedia, Telenet and UPC. The Liberty Global Group also owns 50% of VodafoneZiggo, a Dutch joint venture, which has 4 million customers, 10 million fixed-line subscribers and 5 million mobile subscribers. The LiLAC Group operates in over 20 countries in Latin America and the Caribbean under the consumer brands VTR, Flow, Liberty, Más Móvil and BTC. In addition, the LiLAC Group operates a sub-sea fiber network throughout the region in over 40 markets.

For more information, please visit www.libertyglobal.com.